Wright v. Keokuk County Health Center

• Decision Date: 22 November 2005
• Docket Number: No. 4:04-CV-40436.,4:04-CV-40436.
• Citation: 399 F.Supp.2d 938
• Parties: David WRIGHT, Plaintiff, v. KEOKUK COUNTY HEALTH CENTER and Chad Wolbers, Defendants.
• Court: U.S. District Court — Southern District of Iowa

399 F.Supp.2d 938

David WRIGHT, Plaintiff, v. KEOKUK COUNTY HEALTH CENTER and Chad Wolbers, Defendants.

No. 4:04-CV-40436.

United States District Court, S.D. Iowa, Central Division.

November 22, 2005.

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James E. Brick, Matthew Sean Brick, Brick, Gentry, Bowers, Swartz, Stoltze, Schuling & Levis, PC, Des Moines, IA, for Plaintiff.

Gayla R. Harrison, Harrison, McKay, Moreland & Webber PC, Ottumwa, IA, for Defendants.

ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

GRITZNER, District Judge.

Currently before the Court is Plaintiff's Motion for Partial Summary Judgment and Defendants' Motion for Summary Judgment. The Plaintiff, David Wright ("Wright"), is represented by James Brick and Matthew Brick. Defendants Keokuk County Health Center ("KCHC") and Chad Wolbers ("Wolbers") are both represented by Gayla Harrison. The matter came on for hearing on October 5, 2005, and is fully submitted for ruling.

SUMMARY OF MATERIAL FACTS

Defendant Keokuk County Health Center is a county hospital organized under chapter 347 of the Iowa Code. Defendant Chad Wolbers was the chief executive officer of KCHC. Plaintiff David Wright had served as interim CEO before Wolbers accepted the position, but during all times relevant to this action, he was the chief financial officer of KCHC.

KCHC provides ambulance service to Keokuk County. The ambulance staff members are allowed to sleep in the hospital when they are not on call, but KCHC did not have a defined sleeping area for the staff so they used the ambulance cots or empty hospital beds. Dan Glandon ("Glandon"), the Director of Ambulance Services, sought to acquire a set of bunk beds for the ambulance department to remedy this situation. Glandon's normal spending authorization was limited to $100, but he asked Wolbers for permission to exceed his normal purchasing authority to acquire new beds.¹ The Defendants claim Wolbers authorized Glandon to spend up to $200, but Glandon and Wright assert the amount of money discussed was in the range of $500 to $800.

Glandon submitted an affidavit stating that he was unable to find beds sturdy enough to hold the ambulance staff. He knew Wright had a set of wooden bunk beds in his children's bedroom, which he thought would be suitable. Wright and Glandon discussed a transaction whereby Wright would purchase a new set of beds for his home, and his existing wooden beds would be brought to the ambulance center. Wright and Glandon claim they discussed this openly in front of hospital staff, but Defendants say no other staff members could be found to corroborate this claim. It is undisputed that Glandon had authority to purchase beds and that Wright had the authority to use the KCHC credit card for purchases benefiting KCHC up to $500.

On December 29, 2002, Wright purchased metal bunk beds at a furniture store in Ottumwa. The $500 beds were purchased with KCHC's credit card. No tax was paid on the transaction, as it was processed using KCHC's tax identification number. According to Wright, he made this purchase at the direct request of Glandon and on behalf of KCHC. Glandon testified that he knew Wright was going to purchase the beds using the KCHC credit card but denies he instructed Wright to do so.

The new metal beds were taken directly from the furniture store to Wright's home in Sigourney, Iowa. The wooden bunk beds from Wright's home were taken to the KCHC ambulance department. Glandon testified in his affidavit he was pleased with the exchange and thought it saved KCHC money. Neither Glandon nor Wright could recall informing Wolbers of the exchange or its terms, though both said it was unnecessary because Glandon had been given authority to purchase beds.

Heather Smithart ("Smithart"), a KCHC employee, made a duly authorized purchase on the KCHC account (not the credit card) at the same furniture store, where she learned of the bunk bed purchase. Wright's wife, Stephene, had previously informed Smithart the Wright children had received new bunk beds and their old beds had been donated to KCHC.

Around December 31, 2002, Smithart told Wolbers what she had learned, and Wolbers began an investigation. He contacted the furniture store and inspected the beds in the ambulance department. He discovered a set of black metal bunk beds had been purchased using the KCHC credit card and tax identification number, but a set of wooden bunk beds were in the ambulance department. Wolbers spoke with private counsel and the Keokuk County Attorney and decided to suspend Wright. He called Anthony Latcham ("Latcham"), the president of the KCHC Board of Directors, to arrange a meeting with Wright. He also called Sonya Wehr ("Wehr"), who oversaw human resources and accounts payable. She confirmed the existence of an invoice for the metal bunk beds and a receipt signed by Wright upon which he had written "Ambulance". Wolbers' investigation did not include a discussion with Glandon. Wolbers first spoke to Glandon after Wright's suspension.

Wright, Latcham, and Wolbers met on January 10, 2003, to discuss Wright's suspension. According to Wright, Wolbers asked him if he had made any recent purchases, and Wright described his agreement with Glandon to exchange bunk beds. Defendants claim once Wolbers began questioning Wright, he immediately asked if the meeting was about the bunk beds. Defendants imply this demonstrates a consciousness of guilt or wrongdoing on Wright's part.

After this meeting suspending Wright, Wolbers met with Wright's wife, Stephene, who was a housekeeper at KCHC. According to Wolbers, he called this meeting to ensure Stephene did not hear about her husband's suspension through the rumor mill, and also so Wolbers could investigate what Stephene knew about her husband's purchase. Stephene told Wolbers she did not know the bunk beds in her home were purchased using the KCHC credit card.

Next, Wolbers and Latcham met with both the KCHC Directors Council² and personnel that directly reported to Wright and notified them of Wright's suspension. Wolbers testified he did not mention the specific reasons for the suspension, namely misuse of the credit card, though exactly what was said in this meeting remains unclear. After the staff meetings, Wolbers and Latcham also met with Glandon separately. Glandon was upset that Wright was suspended and did not think a suspension was warranted. Glandon said he told Wolbers the trade was his idea and that Wright should not be punished, but Wolbers denies hearing Glandon take responsibility.

On January 13, 2003, Defendants terminated Wright's employment. Wolbers testified in his deposition that Wright was terminated for misusing the credit card and denied the bunk bed exchange alone was the reason for termination, although he said the bunk bed exchange was wrong. Defendants mailed Wright a letter notifying him of his termination, which he received the following day. Glandon received no discipline as a result of the bunk bed exchange.

On January 14, Wolbers called a meeting, before speaking to Wright, and informed KCHC staff that Wright was going to be terminated because he had misused the KCHC credit card. The undisputed facts show that Defendants told the following people that Wright had misused the KCHC credit card: Lynn Olson (CEO of Ottumwa Regional Health Center and Wolbers' mentor), Stephene Wright (Wright's spouse), Mike Trachta (former KCHC CEO), Sonya Wehr (responsible for accounts payable and human resources), Gayla Smith, Diane Robuck, LaVonne Bloem, Jerlyn Bowers, Heather Smithart, and Bill Halleran (all KCHC employees).

Defendants also reported the incident to the Keokuk County Attorney. Wright characterizes this as reporting a crime, though he was never charged with a crime. Defendants dispute that Wolbers ever used the term "crime", but in Wolbers' deposition he said the purpose of contacting the County Attorney was to see "what I should do in terms of pursuing this as a criminal matter."

On January 30, 2003, the KCHC Board of Directors met in a closed session. Wright and Glandon addressed the group and offered their explanation of the events and encouraged the Board to reconsider Wright's termination. Wright also submitted a written statement to the Board, but his termination was ultimately upheld.

Defendants had the used bunk beds appraised by an auction house in Sigorney, Iowa, and the result was a fair market value of $100 to $125.

After his termination, Wright sought new employment. He disclosed the circumstances of his termination to one employer, First Resources, and two prospective employers. Wright is currently employed outside the health care administration field.

Wright filed a Complaint in this court on August 12, 2004, alleging that Defendants deprived him of a liberty interest without procedural due process in violation of the Fourteenth Amendment; that the communications of the Defendants from the investigation until after his termination have defamed him and forced him to defame himself to others; that the Defendants tortiously inflicted emotional distress upon him; and that the Defendants breached his employment contract by failing to provide notice or severance pay prior to his termination.

Defendants filed an Answer on September 22, 2004. Therein, they denied depriving Wright of any liberty interest without due process of law and denied that any of their statements defamed Wright or forced him to defame himself. Defendants asserted the affirmative defenses of truth and qualified privilege to the defamation claims. Defendants further state Wright's allegation of intentional infliction of emotional distress fails to state a claim upon which relief can be granted and that there was no breach of the employment contract because Wright was terminated for gross misconduct.

On April 29, 2005, Wright filed a Motion for Partial Summary Judgment as to his claims of...